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The Gully Land Consolidation Project (GLCP) was launched to create more arable land by excavating soil from the slopes on both sides of gullies, combined with simultaneous comprehensive gully prevention and control measures. The purpose of the GLCP is to increase crop production and reduce soil erosion to achieve ecological and agricultural sustainability. In this study, we assess the effects of the GLCP on soil erosion and crop production by studying the BaoChengGou Watershed in the Loess Plateau, primarily by means of high spatial-resolution satellite images (taken by the GF-1 and ZY-3 satellites) combined with the InVEST model and field investigations. Sloping cropland, sparse forestland, and natural grassland are the main land use types in the study area. After implementing the GLCP, consolidated land in the cropland increased by 7.35%, an increase that has come largely at the expense of grassland and forestland. The GLCP has markedly reduced soil erosion in the BaoChengGou Watershed, especially in the sense that soil erosion intensity was also reduced significantly in the project region on the whole, despite intensifying in certain places, such as excavated slopes; furthermore, it has improved crop yields in the study area by 10.9%. Comprehensive measurement shows the GLCP to be scientific, reasonable, and clearly efficacious. This study presents findings regarding the positive significance of the GLCP in promoting ecological and agricultural sustainability in the Loess Plateau.